Key Points
- The Ethereum Foundation is preparing to release its financial report amidst community scrutiny.
- Issues have arisen regarding the foundation’s financial accountability following unexplained transfers of Ethereum.
The Ethereum Foundation has announced its intention to release a financial report soon. This decision is a response to the community’s growing interest in the foundation’s spending habits.
Increasing Calls for Transparency
Justin Drake, a researcher at the Ethereum Foundation, made this announcement during an Ask Me Anything (AMA) session on the r/ethereum subreddit.
The upcoming report will follow a similar format to the one released in April 2022. In that report, the foundation disclosed that its assets under management were valued at $1.6 billion as of March 2022, with $1.3 billion of that being in Ethereum.
Drake responded to concerns about the foundation’s financial management. He stated that the foundation spends roughly $100 million each year. He also mentioned that about $650 million worth of funds are kept in the foundation’s main Ethereum wallet, which could last approximately 10 years depending on Ethereum’s market price.
Drake explained that the budget plan involves spending 15% of the foundation’s remaining funds each year. Ethereum co-founder Vitalik Buterin confirmed this in a separate comment on the subreddit, stating that this budget strategy would result in the Ethereum Foundation gradually shrinking over time.
Unexplained Ethereum Transfers Stir Controversy
The Ethereum Foundation’s financial accountability has been called into question due to several unexplained Ethereum transfers. For example, blockchain analytics provider Lookonchain reported a transfer of 35,000 Ethereum, worth $94.07 million, from the Foundation to the Kraken Exchange.
This lack of transparency has led to fear, uncertainty, and doubt within the Ethereum community. In response to these concerns, Aya Miyaguchi, Ethereum Foundation Executive Director, explained that the budget primarily covers grants and salaries and is part of the foundation’s “treasury management”.
However, a user known as hyper1on (@0xhyper1on) disputed this explanation with a photo of transactions carried out in addition to the Kraken transfer. This image shows six transfers of 1,000 Ethereum between January and August 2024.
Other community members questioned why the Ethereum Foundation waited until concerns were raised before taking action. They were also displeased that they learned about the Kraken transfer through a third-party notification.
At the time of reporting, Ethereum was trading at $2,367.23, a 1.02% decrease in price over the last 24 hours.
